A report from Candy‘s Dirt in Dallas. “We have luxury homes sitting on the market at 400 and 500 days. We have millions of dollars in price reductions on some of these. It’s time to make some decisions and face reality. Sure, some deals have fallen through. Sellers are difficult and overvalue their homes. However, none of that excuses bad photography or lack of staging expertise. I know we are in Texas, but the deer mounts need to go.”
The Sequim Gazette in Washington. “For the second year in a row, the Sequim area toppled its highest average and median home sale prices. According to Team McAleer at RE/MAX Prime, average home sale prices in the Sequim School District boundaries jumped more than $100,000 from $448,140 in 2020 to $548,480 in 2021. At one point last summer asking prices were even higher, with McAleer reporting the average asking price at about $661,000 and the median price at $575,000.”
“‘Prices rose significantly in the second half of the year, but not as drastically as they rose in the first half,’ Brody Broker Team Keller Williams Realty wrote, adding that he believes the market may be at or close to its peak.”
From CNN Business. “If you’re one of many would-be homebuyers who got shut out of the real estate market last year, you might be hoping for better luck in 2022. The good news is that you probably won’t see the jaw-dropping jumps in home prices seen last year. ‘That kind of price increase was a shock. ‘Unprecedented’ is not strong enough. It was nuts,’ said Skylar Olsen, principal economist at Tomo Networks, a buyer-focused mortgage and home-purchasing platform.”
“Olsen said she’s fearful the pressure and fatigue will lead buyers to make rash decisions they may regret. ‘I’m so worried that people will buy out of desperation to finally win a bid and not buy at a price they can afford sustainably,’ she said.”
From Rolling Out on Georgia. “Atlanta real estate agent Eric Hill has been sentenced for his participation in a mortgage fraud scheme that netted more than $21 million in fraudulent mortgage loans. Many of the fraudulent loans were insured by the Federal Housing Administration (FHA), resulting in over $850,000 in claims being paid for mortgages that have defaulted. Hill also engaged in a scheme to defraud his employer, a national real estate developer, out of over $480,000 in real estate commissions.”
The Marin Independent Journal in California. “The fallout of a massive fraud scheme by Marin investment managers has resulted in a $436.5 million sale of North Bay properties. The sale involved 60 sites formerly controlled by Professional Financial Investors Inc. and its associated fund. The principal, Ken Casey of Novato, died in 2020.”
“The properties, amounting to more than 1.4 million square feet, were sold off last month in federal bankruptcy court. They properties range from 3,500 square feet to 85,000 square feet, including 935 residences and approximately 680,000 square feet of commercial space. ‘It’s one of the biggest portfolio sales in our county’s history,’ said Haden Ongaro, executive vice president with the Newmark Knight Frank real estate firm.”
“Wallach pleaded guilty to federal fraud charges in 2020. He admitted to being aware that the companies had ceased to be profitable, but continued to obtain properties and assure investors of their financial stability. The companies took on new investors whose payments were used to pay interest to existing investors.”
The Daily News in California. “A nightmare scenario looms for condo buyers applying for certain types of federally-backed mortgages. If you are selling or are looking to buy an attached condominium in a community with five or more attached units, conventional financing from mortgage giants Fannie Mae and Freddie Mac may soon become elusive. Beginning Jan. 1 for Fannie and starting Feb. 28 for Freddie, the mortgage giants are putting the screws to a required HOA questionnaire.”
“‘Yes, lenders are declining projects even for a simple special assessment for repairs now. Things are just trickling in right now because the guidance started January 1,’ said one condo project approval expert, who asked to remain unnamed because he’s not the media spokesman for his company. ‘Soon enough we’ll see the effects hit all the condo market.’”
“Why is this so problematic? The nation has a huge community of really old condos and many of them are backed by Fannie Mae and Freddie Mac mortgages. The U.S. has as many as 156,000 condo associations and cooperatives housing between 27 and 32 million Americans, according to the Community Associations Institute. ‘Seventy percent of all condo loans in the U.S. are Fannie or Freddie (backed),’ said Dawn Bauman, senior vice president of government affairs at CAI. ‘Sixty to 70% of all condo complexes are more than 30 years old.’”
“Fannie Mae has a published list of 82 “unavailable” California condo-projects including the Marina City Club in Marina Del Rey. That a 10-acre complex is one of nearly 1,000 ‘unavailable’ condo projects nationwide. To Fannie Mae, unavailable means a property is ineligible for purchase by the agency.”
The Bergen Report. “One of the most expensive homes in New Jersey has finally sold after years on the market. The 30,000-square-foot Stone Mansion, located on the famous Frick Estate in Alpine, was purchased for $27.5 million. The mansion was completed in 2013 after the previous owner Richard Kurtz purchased part of the 60-acre Frick Estate, which is divided between Alpine and Demarest, for $58 million in 2006.”
The Globe and Mail. “Canada is on the cusp of a series of rapid interest-rate hikes, with the central bank poised to start raising the cost of borrowing as early as next week, beginning a sustained push to bring high inflation back under control. After nearly two years of extraordinarily low interest rates, the Bank of Canada has arrived at a pivot point. ‘The bank basically has a free option [to raise rates next week],’ National Bank rates strategist Taylor Schleich said. ‘The economy is screaming that we need interest-rate normalization, and now the banks and the markets are kind of allowing them to do it. So you may as well take it.’”
“Governor Tiff Macklem has not spoken publicly since mid-December. But he used his last speech to tee up a possible shift in January, noting that inflation was ‘well above our target, and we are not comfortable with where we are’ – strong language for a central banker.”
From Domain News in Australia. “Sydney’s rapidly rising property prices are tipped to slow in 2022, with buyers facing less competition as more homes hit the market. The runaway prices seen on the northern beaches last year have come to an end, according to buyer’s agent Peter Kelaher. He also had his eye on Elanora Heights, Narraweena and Beacon Hill, where he estimated prices had come back about 5 per cent as more homes hit the market late last year – predominantly in the $2 million to $2.2 million range – enabling better buying for house hunters.”
“Closer to the city, Rosebery and Waterloo could represent good buying for those looking for apartments, said Michelle May, of Michelle May Buyers Agents, but warned buyers would need to be selective and do their due diligence checking a building’s strata history. ‘There may be some good opportunities now there is a lot more supply there. I think they will become more desirable with the new train line station and [nearby] Green Square becoming more of a real suburb as opposed to a ghost town with just high rise.’”
From Reuters. “Beaten-down dollar bonds issued by Chinese property developers are enticing domestic and global fund managers, some of whom are even planning to launch new funds targeting bargains as Beijing relents in its concerted drive to clean up the sector. Jupai Holdings Ltd, a Chinese wealth manager, plans to start a fund to bet on such offshore Chinese property bonds. ‘I think roughly half of the developers’ dollar bonds were slaughtered by mistake,’ Jupai Chairman Jianda Ni said. ‘We will spot value in what others dumped as trash.’”
“Roughly half of the dollar bonds issued by Chinese developers trade below 80 cents on the dollar, according to an estimate by Essence Securities last week. Some bonds issued by major developers currently yield more than 60%.”
The South China Morning Post. “Chinese developer Yuzhou Group Holdings warned of certain bond default events, citing the liquidity crisis affecting the company and the wider real estate industry. The Hong Kong-listed company said in an exchange filing on Monday that it will not pay the principal and interest on untendered dollar bonds due on Tuesday, and did not make the payment on another bond tranche due on Sunday. The total principal amount due on the notes was close to US$105 million, it said.”
“‘Having carefully considered its liquidity position in light of the deteriorating real property market and tightening of the onshore supervision of financing activities and cash balances,’ the company opted not to pay back the untendered amount of bonds, Yuzhou said in the filing.”